170-year-old retailer Harris Scarfe falls into receivership

Written on the 11 December 2019 by Matt Ogg

170-year-old retailer Harris Scarfe falls into receivership

Neither a longstanding legacy nor a nation-leading customer satisfaction rating amongst department stores were enough to save the chain from its fate. 

An iconic South Australia-headquartered retailer with annual sales of $380 million has today been placed in receivership, joining a long list of bricks-and-mortar chains to bite the dust over the past 18 months.

Following suit from the likes of Roger David, Ed HarryNapoleon Perdis, Shoes of Prey, Karen Millen Australia and Bardot, Harris Scarfe has hit a low point.

Now selling a wide range of offerings including fashion, bed linen, electrical appliances, kitchenware and home decor, Harris Scarfe employs more than 1,800 staff across 66 stores around the country and is best-known in South Australia, Victoria and Tasmania.

The company's 170-year-long legacy brand was not enough to keep it from falling on hard times with the rise of e-commerce and greater competition, and today both receivers and administrators were appointed.

Deloitte Restructuring Services partners Vaughan Strawbridge, Kathryn Evans and Tim Norman were appointed by a secured lender of Harris Scarfe to be receivers and managers over the retailer and "a number of associated entities"

Strawbridge says trading will continue as normal over the Christmas period and employees will continue to be paid by the receivers.

He also emphasises his confidence there will be more than sufficient assets to meet all employees' entitlements.

The receivers intend to achieve a sale of the business as a going concern and preserve the employment of as many people as possible, and have also promised to honour gift cards and lay-by deposits in full.

"Harris Scarfe is a longstanding retail institution. We will be making every effort to secure a future for the business and intend to commence an immediate sale of business process," says Strawbridge.

The announcement today marks the end of a long journey that began in South Australia in 1849 when George Peter Harris and John C Lanyon laid the foundations of the business as Lanyon & Harris.

They opened the first store in Hindley Street, Adelaide in 1850, but five years later Lanyon returned to England leaving Harris as the sole owner of the business.

Two years later, Harris weclomed George Scarfe and Richard Smith and the retailer's name was changed to Geo. P. Harris Scarfe & Co.

Two decades after that in 1877, the company purchased its first Grenfell Street address, not too far from the current flagship store located in the busy Rundle Mall shopping hub.

In 1920 the company's name was rebranded to Harris Scarfe, and it was just four years ago now that the business claims it was given a "new lease on life" with a new logo, signage, look and the opening of new stores.

Research conducted by Roy Morgan earlier this year even found Harris Scarfe led the way in customer satisfaction amongst discount department stores, rating 90.1 per cent compared to Kmart at 88.9 per cent and Best & Less at 88.7 per cent.

The results were based on interviews with more than 50,000 Australians per annum in their own homes, including 9,000 interviews with people who shop at a discount department store in an average four weeks.

"Harris Scarfe's victory in the Roy Morgan Discount Department Customer Satisfaction Award for April was as a result of a big improvement over the year from 83.2 per cent to 90.1 per cent," Roy Morgan CEO Michele Levine said at the time.

"The focus on customers resulting in high customer satisfaction ratings of leading discount department stores shows that Harris Scarfe, Kmart, Best & Less, Costco and Big W and others are taking the threat posed by online retailer Amazon seriously.

""In an increasingly competitive environment with discount department stores facing increasing competition from online retailers such as Amazon, the big two department stores Myer and David Jones, specialist niche retailers and of course each other, maintaining a high level of customer satisfaction and building a reputation of trust is key."

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Business News Australia

 
Author: Matt Ogg

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